These two terms sound similar, but they mean very different things. Knowing the difference helps you avoid surprises when it’s time to make an offer.

What is mortgage pre-qualification?

Pre-qualification is a quick estimate of how much you might be able to borrow. It’s based on self-reported information about your income, debts, and assets.

You can get pre-qualified online in minutes, often without a credit check. It’s a good way to get a rough budget but not something you can rely on when submitting an offer.

What is mortgage pre-approval?

Pre-approval is a formal process where a lender reviews your full financial picture — including income, credit report, and documentation — to confirm how much you qualify for.

You’ll receive a pre-approval letter showing your maximum purchase price, rate, and term. Sellers and realtors take this far more seriously than a pre-qualification.

Main differences

| Feature | Pre-Qualification | Pre-Approval | | --- | --- | --- | | Based on | Self-reported info | Verified financials | | Credit check | No | Yes | | Rate hold | No | Yes, 90–120 days | | Reliability | Estimate only | Verified and lender-backed |

Read More: Step-by-Step: How to Get Preapproved for a Mortgage Online and Save Time

Which one should you choose?

If you’re casually browsing homes, a pre-qualification is fine. But once you’re ready to make an offer, get pre-approved. It gives you leverage and saves time when you find the right property.

Online mortgage platforms like Homewise make this easy by letting you compare options from 30+ lenders in one application.

While pre-qualification gives you a rough estimate for casual browsing, you need a formal pre-approval to be taken seriously when you are ready to make an offer on a home.

FAQs

1. Do I need both pre-qualification and pre-approval?

No. Pre-approval is all you need once you’re serious about buying.

2. Does pre-approval cost money?

No. Most lenders and brokers, including Homewise, offer it for free.

3. Can I switch lenders after pre-approval?

Yes. You can still compare and choose another lender later.

4. How long does each take?

Pre-qualification takes minutes, pre-approval can take a day or two depending on documents.